The European Union is set to propose rules for cloud computing contracts that would limit the ability of foreign cloud providers to bid for state tenders.

Citing documents, Reuters reports that the new criteria could be published today, June 3, and would see a requirement for software and hardware to be developed in the EU.

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This would significantly limit US hyperscalers' ability to secure contracts, and is expected to apply to sensitive sectors such as banking, energy, and healthcare.

In order to proceed, the proposal would need backing from all 27 countries in the EU and from the European Parliament.